Financial Management

Financial Management is a process, having as its primary objective the optimization of financial and economic benefits from an investment. It ensures accountability and efficiency in the management of public resources by providing:

• the essential information needed by those who manage, implement, and supervise projects, including government oversight agencies and financial institutions;
• the assurance needed by the borrower country, lenders, and donor community that funds are being used efficiently;
• a deterrent to fraud and corruption, since it offers the necessary controls to detect unusual occurrences quickly.

The objectives of the (COWASAO) financial management work are:

Financial managers need to determine financial management objectives for efficient procurement, use of resources and minimizing costs. Here are the most important financial management objectives that businesses across industries need to prioritize:

1: PROVIDING GOOD DRINKING WATER TO RURAL COMMUNITIES

The basic objective of financial management is to achieve optimal profit, both in the short and long run. It even includes wealth maximization, where every shareholder’s value or hold over dividends should increase. These outcomes are related to business performance, which means that the better a business performs, the higher its market value of its shares will be.

2: PROPER MOBILIZATION

Effective mobilization is one of the most important objectives of financial function. It means that managers need to make decisions regarding the allocation and utilization of various funds. Whether it’s shares or debentures, finance managers need to estimate an organization’s requirements and make financial decisions accordingly.

3: IMPROVED EFFICIENCY

Proper utilization of finance also encourages proper distribution. From creating inventories to investing in profitable businesses, mobilization and utilization of finances lead to better business decisions. This also allows managers to dedicate resources and distribute them among departments, increasing the overall efficiency of an organization.

4: BUSINESS SURVIVAL

The primary goal of financial management is ensuring an organization’s survival. As the term suggests, businesses need to survive the competitive market and the best way to do so is to manage their financial resources. Managers need to make big decisions after due diligence. They may consult with external members or agencies if needed. Every decision makes a difference as it impacts the business.

5. BALANCED STRUCTURE

As financial managers prepare capital structure, it creates balance among different sources of capital. This balance is essential for liquidity, flexibility and stability. This further decides the ratio between owned capital and borrowed capital.

Financial Reporting

Corporate governance within the (COWASAO) is supported by appropriate financial and management reporting to both internal and external stakeholders. Based on the Committee of Sponsoring Organizations of the Treadway Commission internal control framework, the (COWASA)  has put in place a robust mechanism for the certification of the effectiveness of the internal controls over external financial reporting. This annual certification statement is signed by the President and Vice President – Finance as well as the Financial Controller. A separate attestation is also provided by the (COWASAO) external auditors. In addition, the (COWASAO)  has a comprehensive system of reporting to the Board of Directors and to external Bodies and Organizations. This includes reporting by the Office of Auditor General to the Audit and Finance.